THE NATIONAL TREASURY

Transcription

1 REPUBLIC OF KENYA THE NATIONAL TREASURY DIRECTORATE OF PUBLIC DEBT MANAGEMENT MONTHLY DEBT BULLETIN MARCH 2015

2 1.0 PUBLIC DEBT 1.1 Introduction As at nd March 2015, total public and publicly guarantd dbt stood at Kshs 2, billion or prcnt of GDP (Tabl 1). Th incras of 0.95 prcnt ovr th nd Fbruary 2015 position is attributd to an incras in domstic dbt. Extrnal dbt dcrasd by Ksh billion to stand at Ksh 1, billion, whil th gross domstic dbt incrasd by Ksh billion to stand at Ksh 1, billion in March 2015 (Tabl 1). Tabl 1: Siz of public dbt, nd March 2015, in billion Dbt Catgory Kshs USD Domstic Dbt 1, Extrnal Dbt 1, Total 2, and Cntral Bank of Knya Prcntag of GDP Th structur of public and publicly guarantd dbt shows that 52.2 prcnt of th total dbt is domstic dbt whil 47.8 prcnt is xtrnal dbt (Chart 1). Chart 1: Composition of public dbt 47.9% 52.2% Domstic Dbt Extrnal Dbt 1.2 Cost/Risk Charactristics of Public Dbt Rflcting Govrnmnt xtrnal dbt stratgy of contracting or guaranting xtrnal loans with highly concssional trms to minimis intrst rat cost, th avrag intrst rat and grac priod on th xtrnal dbt portfolio was 2.9 prcnt and 7.3 yars, rspctivly. In addition, th avrag maturity priod for xtrnal loans was 15.5 yars whil th avrag grant lmnt was 59.6 prcnt. As an indication of th succss in th lngthning of maturity structur of domstic dbt to minimis rfinancing risk in lin with th 2014 Mdium Trm Dbt Stratgy, th avrag maturity profil of outstanding Govrnmnt domstic dbt stood at 5 yars 3 months as at nd March Pag 1 of 14

3 1.3 Movmnt in Exchang Rats Tabl 2 shows markt indicativ nd-month forign xchang rats for th priod January to March During this priod, th Knya shilling apprciatd against th Strling Pound, Euro and JPY by 1.42, 4.21 and 1.15 prcnt rspctivly but dprciatd against th US Dollar by 0.72 prcnt rspctivly. Th shilling stood at Kshs to th US Dollar at nd of March Tabl 2: Movmnt in xchang rats C urrn cy U S Dollar STG P ound Euro JPY(100) Janu ary F bruary Marc h So urc: Cntral Ba nk of Kny a Chart 2 shows th trnds in daily xchang rats btwn Knya Shilling and th four major forign currncis from Dcmbr 2014 to March Th Knya shilling showd mixd ractions with stability within th month of March Chart 2: Knya Shilling Exchang Rat E x c h a n g R a t s GBP EURO 92.0 USD JPY Sourc: Cntral Bank of Knya Pag 2 of 14

4 2.0 EXTERNAL DEBT 2.1 Siz of Public and Publicly Guarantd Extrnal Dbt Ovrall, public and publicly guarantd xtrnal dbt dcrasd by Kshs billion as at nd March 2015 to Kshs 1, billion from Kshs 1, billion at th nd of Fbruary 2015 (Tabl 3). Th dcras is mainly attributd to strnghning of th shilling against major currncis during th priod. Tabl 3: Extrnal dbt stock, in billions Fbruary 2015 Kshs USD Bilatral Multilatral Guarantd Supplirs Crdit Commrcial Banks Total , March 2015 Kshs USD Chart 3 blow indicats th currncy composition of xtrnal dbt, and it shows that th US Dollar forms th largst shar of th xtrnal dbt portfolio at 56.5 prcnt followd by th Euro at 23.4 prcnt. Chart 3. Currncy Composition Japans Y n 9.7 % E u ro % Y uan 4.5 % U.S. d o ll a r % O th r s 0.5 % G BP 5.4 % 2.2 Structur of Extrnal Dbt by Crditor Official crditors account for prcnt of th total public and publicly guarantd xtrnal dbt. Dbt owd to multilatral crditors amounts to Ksh billion (including Ksh 4.16 billion guarantd dbt owd to IDA) dominats th portfolio at prcnt of th total. Bilatral dbt stands at Kshs billion (30.09 prcnt of th total), inclusiv of Kshs billion guarantd dbt, (Chart 4 and Annx 1). In th multilatral catgory, IDA, ADB/ADF and IMF account for th largst proportion of xtrnal crdit, whil China, Franc and Japan ar th lading crditors in th bilatral catgory. Th Commrcial dbt constituts 20.3 prcnt of th total public and publicly guarantd xtrnal dbt. Pag 3 of 14

5 Chart 4: Extrnal Dbt by Crditor P r c n t a g Dc Jan Fb-15 Mar Bila tral Multilat ral Supp lir Crdit Commrcia l Banks 2.3 Extrnal Dbt by Sctor Chart 5 blow illustrats how th outstanding xtrnal dbt is shard among th conomic and social sctors of th conomy. Chart 5: Extrnal Dbt Shar by Sctors D I S B U R S E D O U T S T A N D I N G D E B T E NE R GY, IN F R A & IC T A G R I C P U B LI C AD M IN IS T R A T IO N G E N ER A L E C O N O M IC & IN T ER N A T I O N A L C O M M ER C IA L L A B O U R R E LA T IO N S A F FA IR S E N V IR O N M E N T AL P R O TE C T IO N, W AT ER A ND HO US I N G A G RIC H E A LT H E D UC A T IO N -5.0 Pag 4 of 14

6 2.4 Projctd Cumulativ Extrnal Dbt Srvic Projctd cumulativ xtrnal dbt srvic for th priod to nd March 2015 stood at Kshs billion. Principal and intrst projctions for th month of March 2015 was Kshs 3.52 billlion and Kshs 2.37 billion, rspctivly. Bilatral and multilatral crditors constitut prcnt and prcnt of th cumulativ projctd dbt srvic rspctivly during th priod undr rviw (Tabl 4). Tabl 4: Projctd Cummulativ Extrnal Dbt Srvic as at nd of March 2015, in Kshs million Crditor catgory Principal Intrst Total Bilatral 9, , , Multilatral 10, , , Commrcial 54, , , Guarantd Total 75, , , Actual Cumulativ Extrnal Dbt Srvic Actual cumulativ dbt srvic as at nd March 2015 was Kshs billion (Tabl 5). Actual principal and intrst paymnts for th month of March 2015 was Kshs 2.82 billion and Kshs 1.34 billion rspctivly. Tabl 5: Actual cumulativ xtrnal dbt srvic as at nd of March 2015, in Kshs million Crdit catgory Principal Intrst Total Bilatral 9, , , Multilatral 10, , , Commrcial 53, , , Guarantd Totals 73, , , Budgt Dviation Th actual cumulativ dbt srvic for March 2015 was abov th projctd dbt srvic by Kshs 1.29 billion This is attributd to xchang rat variations btwn th projctd and actual xchang rats and arrars for Fbruary paid in th month of March. Pag 5 of 14

7 2.7 Guarantd Extrnal Dbt Undr th Public Financ Managmnt Act, 2012, th govrnmnt may issu guarants undr various conditions so long as it dos not xcd th statutory ciling st by Parliamnt which currntly stands at Kshs 200 billion. In th month of March 2015, th guarantd xtrnal dbt stock dcrasd by Kshs 264 million to Kshs billion from Ksh billion in Fbruary 2015 (Tabl 6). This dcras is attributd to nt rpaymnts. Tabl 6: Guarantd outstanding dbt by crditor, in Kshs million Crditor January 2015 Fbruary 2015 March 2015 Japan 36, , , Canada U.S.A IDA (KR Concssionair) 4, , , Totals 41, , , Th national govrnmnt has not issud any nw guarants to ithr County and Stat Corporations in th priod July 1st, 2014 to dat. Pag 6 of 14

8 3.0 DOMESTIC DEBT 3.1 Cntral Govrnmnt Domstic Dbt Govrnmnt nt domstic dbt incrasd by Kshs billion to Kshs 1, billion in March 2015 from Kshs 1, billion in Fbruary 2015 du to incras in gross domstic dbt ovr th priod (Tabl 7). Tabl 7: Govrnmnt domstic dbt, in Kshs billion January 2015 Fbruary 2015 March , , , , , , Gross domstic dbt lss Govt. dposits at CBK Govt. dposits at commrcial banks Govt. advancs to parastatals Nt domstic dbt Sourc: Cntral Bank of Knya 3.2 Govrnmnt Domstic Borrowing During th month of March 2015, Govrnmnt scuritis worth Kshs billion wr advrtisd. Bids worth Kshs billion wr rcivd of which Trasury Bills was Ksh and Trasury Bond was Ksh billion. Succssful bids amountd to Kshs billion against rdmptions of Kshs billion laving xchqur with a surplus of Kshs billion (Tabl 8). Tabl 8: Govrnmnt domstic borrowing, in Kshs million Tra su ry Bi lls Tr asur y Bond s A dvrti s d 40,000 50,000 90,000 Bids rc iv d 90,377 76, ,771 Succ ssful bids 62,387 50, ,818 (30,281) (3,060) (33,341) 32,106 47,371 79,477 Rd mpt ions (cost) N t dom sti c borrowing Total Pag 7 of 14

9 Tabl 9: Domstic dbt instrumnts by holdr nd March 2015, in Kshs billion Instrumnt/Holdr Commrcial banks Non banks Cntral Bank of Knya Non rsidnts Total Trasury bonds Trasury bills Othrs Total , Prcntag Holding At th nd of March 2015, banks hld th largst proportion of th outstanding Govrnmnt dbt scuritis amounting to Kshs billion or 51.2 prcnt ( Tabl 9 and Chart 6.) This prcntag compriss mostly Trasury Bonds and Bills. Th non banks catgory compriss non bank financial institutions, National Social Scurity Fund (NSSF), parastatals, insuranc companis, building socitis, pnsion funds and individuals. Th Non Banks hld Kshs billion or 43.3 prcnt whil th Govrnmnt dbt worth Kshs billion or 0.9 prcnt was hld by non rsidnts who invst through nomin accounts in th local banks. Kshs billion hld by Cntral Bank of Knya compriss th Govrnmnt ovrdraft and Rpo Trasury Bills usd for xcution of montary policy. Chart 6: Domstic dbt by holdr as at nd March 2015 Non rsidnts 0.9% Cntral Bank of Knya 4.6% Non banks 43.3% Commrcial banks 51.2% Sourc: Cntral Bank of Knya Pag 8 of 14

10 3.3 Domstic Dbt by Instrumnts Chart 7 shows th composition of th domstic dbt as at nd March prcnt of Govrnmnt domstic dbt was in Trasury Bonds, 24.5 prcnt in Trasury Bills whil th balanc is mainly th Govrnmnt ovrdraft at th Cntral Bank of Knya. Th structur of th holding is consistnt with th dbt stratgy of holding mor domstic dbt in longr datd instrumnts to minimis rfinancing risk and promot dvlopmnt of domstic markts for Govrmnt scuritis. Chart 7: Domstic dbt by instrumnt 80.0% P r o p o r t i o n 70.70% 70.0% 60.0% 50.0% 40.0% ( )% 24.50% 30.0% 20.0% 4.80% 10.0% 0.0% Sourc: Cntral Bank of Knya Trasury Bond Trasury Bill Othrs Pag 9 of 14

11 3.4 Nt Domstic Financing Tabl 10 shows that as at nd March 2015, th nt domstic financing was at Kshs billion. Tabl 10: Nt domstic financing, in Kshs billion Trasury Bills Trasury Bonds Pr-1997 Govt. Ovrdraft dbt Othr of which Ovrdraft (from CBK) Govt. dposits Nt Domstic Crdit Jun-2014 March-2015 Chang , , (0.55) (0.92) Sourc: Cntral Bank of Knya 3.5 Cumulativ Domstic Intrst Paymnts As at nd March 2015, Govrnmnt actual cumulativ domstic intrst paymnts stood at Kshs billion against th cumulativ projctd intrst paymnts of Kshs billion. Actual intrst paymnts on Trasury Bonds and Trasury Bills amountd to Kshs billion and Kshs billion rspctivly (Tabl 11). Tabl 11: Domstic intrst paymnts, in Kshs million Typ of Dbt Trasury Bonds Trasury Bills Ovrdraft Pr-1997 ovrdraft dbt Totals Projctd 71, , , , Actual 62, , , , Varianc 8, (1,821.97) 1, , Pag 10 of 14

12 3.6 Avrag Intrst rats for Trasury Bills Chart 8 shows th monthly trnds on avrag intrst rats for both th 91-day and 182-day Trasury Bills sinc Novmbr During th month of March 2015, th avrag intrst rats for th 91-day Trasury bills droppd by 10 basis points from 8.59 prcnt in Fbruary to 8.49 prcnt in March 2015 and th 182days Trasury bill incrasd by 3 basis point to pr cnt from prcnt pr annum. 364-days Trasury bill rat stood at an avrag of prcnt pr annum in March Chart 8: Avrag intrst rats on Trasury Bills I n t r s t R a t d a ys d ay s M o n th s Sourc: Cntral Bank of Knya 3.7 Yilds on Trasury Bonds Th Govrnmnt has bn implmnting a Bnchmark Bond programm to incras liquidity around slctd Bonds and promot scondary trading. On of th ky objctivs of th programm is to lowr both rfinancing risk and cost of borrowing by th Govrmnt. Tabl 12 and Chart 9 shows th yilds on slctd bnchmark Trasury Bonds in th scondary markt as at nd March Tabl 12 :Yilds on slctd Trasury Bonds Tnur 2 YR 5 YR 10 YR 15 YR 20 YR 25 YR Rat (%) Sourc: Nairobi Scuritis Exchang (NSE) Pag 11 of 14

13 Chart 9: Scondary Markt yilds on slctd Trasury Bonds 14.5% 14.0% 13.5% R 13.0% a t 12.5% s % 12.0% 11.5% 11.0% 10.5% 2YR 5 YR 10 YR 15YR 20 YR 25YR Tnur Pag 12 of 14

14 ANNEX 1: STOCK OF PUBLIC AND PUBLICLY GUARANTEED EXTERNAL DEBT BY SOURCE (IN KSHS MILLIONS) CREDITOR Stock at nd Fbruary 2015 Stock at nd March 2015 Chang CENTRAL GOVERNMENT BILATERAL AUSTRIA (12.94) BELGIUM 6, , (154.56) CANADA DENMARK 1, , (47.78) FINLAND (0.48) FRANCE 56, , (1,617.81) GERMANY 21, , (536.20) ITALY 1, (22.81) JAPAN 37, , (566.80) NETHERLANDS 1, , (111.11) UK 1, , (49.57) USA 4, , PARIS CLUB OTHERS 5, , NON PARIS CLUB 207, , , o/w CHINA 202, , , Sub total 346, , MULTILATERAL ADB/AFDB 147, , (14,571.08) EEC/EIB 19, , (550.95) IDA 376, , (5,957.46) IFAD 10, , (62.32) IMF 73, , (737.07) OTHERS 8, , (73.23) Sub total 636, , (21,952.10) COMMERCIAL BANKS 257, , , SUPPLIERS CREDIT 15, , (128.03) Sub Total 1,255, ,236, (18,376.90) GUARANTEED DEBT CANADA JAPAN 37, , (269.35) USA (38.85) IDA (KR Concssionair) 4, , Sub Total 41, , (263.70) GOK+ GUARANTEED TOTAL 1,296, ,278, (18,640.59) Mmorandum itm Nominal GDP (in Kshs Billion) 5,559 Sourc: QEBR 2015

15 Information in this publication may b rproducd without rstriction provid d that du acknowldgmnt of th so urc is mad. Enquiris covring th publication should b addrssd to: Th Dirctor, Dbt Managmnt Dpartmnt, Na tional Trasury 1st Floor, Trasury Building, Haramb Avnu P.O Box , Nairo bi, Knya Tl: (25 4) Fax: (254) dmd@trasury.go.k Pag 14 of 14